If Alan Is Risk-Averse, Then He Will Always

question 8

Multiple Choice

If Alan is risk-averse, then he will always

• A)choose not to play a game where he has a 50 percent chance of winning $5 and a 50 percent chance of losing $5.
• B)choose not to play a game where he has a 75 percent chance of winning $5 and a 25 percent chance of losing $5.
• C)choose to play a game where he has a 55 percent chance of winning $5 and a 45 percent chance of losing $5.
• D)choose to play a game where he has a 25 percent chance of winning $5 and a 75 percent chance of losing $5.

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Definitions:

Expert Power

The power that exists when an agent has specialized knowledge or skills that the target needs.

Relevant

Being closely connected or appropriate to the matter at hand.

Useful

Having a beneficial use or being able to serve a purpose effectively.

Reward Power

Power based on an agent’s ability to control rewards that a target wants.